By Tracey Chadwell, Senior Director, Medical Surgical Advisory Solutions
In our last post, we introduced the idea and value of making supply chain a strategic function of your healthcare organization and shared the idea of a supply chain hierarchy, beginning with some important building blocks. Here, we progress further through the hierarchy, with advanced and graduate levels.
Advanced Supply Chain – The advanced supply chain area takes a bit of a deeper dive into high impact areas of spend that include:
- Physician Preference Items – Many healthcare providers struggle to manage the large numbers of physician preference items (PPIs), which tend to limit supply chain efficiencies and increase the total cost of inventory management. A successful program should be built on a customized, collaborative approach that brings physicians, healthcare executives and supply chain together to work toward a common goal of reducing healthcare costs, while improving patient outcomes.
- Purchased Services – 30% of a facility’s spend, including capital, leases and other operating expenses, is ripe for inclusion in a formal program to manage your purchased services, so this category of expense does represent a significant opportunity to impact the bottom line.
- Construction, Capital Equipment Planning and Contracting – Medical equipment is among the highest costs in healthcare today. Equipment intensive spaces such as Lab, Pharmacy, Emergency, Surgery, Imaging and Intensive Care can have equipment costs that exceed the cost of construction. Equipment and its use touches nearly every aspect of healthcare: cost, quality, clinical outcomes, innovation and recruitment.
Graduate Supply Chain – For those organizations ready to make the final and most advanced step in supply chain transformation, it’s important to engage multiple executive services and multiple best practices as implemented by peers and those outside the healthcare industry. This graduate level brings value in areas including:
- Strategy, organization and culture.
- Strategic sourcing, logistics management, supplier development and transactional procurement.
- Utilization management and reduction of variations in practice.
- Process improvement.
- Leadership development.
- Use of actionable data, including benchmarking.
- Maximization of reimbursement.
- Consideration of life cycle costs (Total Cost of Ownership).
In conclusion, optimizing the healthcare supply chain may mean very different things, depending on the size and scope of your organization, but at the very least, it mandates a change in thinking as well as practice. It means that supply chain management needs to define its strategic role and begin to execute value-added activities across all aspects of the value chain. The advantages of optimizing your supply chain will yield improvements in costs through:
- Enhanced operational costs with a total cost of ownership focus.
- Quality, through increased compliance with contracts and reduced organizational risk.
- Improved patient outcomes and safety through integrated systems to reduce errors and streamline procurement via automation.
We Can Help. Intalere provides resources that can assist in every area of your supply chain, no matter where you are on your journey. Reach out to see how we can help. Contact Customer Service at 877-711-5600 or firstname.lastname@example.org or your Intalere representative.